Is this the first step towards forest-protection carbon credits? Photograph: Paul A Souders/Corbis

Though it didn't seems to make an enormous splash in the press, the deal reached this week between three US states, Indonesia and Brazil seems like a fairly big deal in terms of rainforest protection.

The agreement was brokered at the climate summit convened by California's ecosavvy governor, Arnold Schwarzenegger. Along with fellow governors from Illinois and Wisconsin, Schwarzenegger signed an agreement that could see carbon credits earned from forest protection in Indonesia or Brazil incorporated into US emissions trading schemes.

Partly, this is significant simply because there haven't been very many large-scale international efforts to protect the world's dwindling rainforests – despite the huge climate change impact of tropical deforestation. The Brits and Norway have launched a big project in the Congo basin, but there are few other examples. (One looked promising last year when Guyana offered to hand over the protection of its forests to the British government, but that has so far come to nothing.)

Mainly, though, this deal is significant because it's the first time – or at least the first I'm aware of – that carbon credits earned by protecting existing forests could be incorporated into large-scale emissions trading schemes. It means, in the simplest possible terms, that Indonesian or Brazilian forestry schemes will be able to get funded by American companies who want to produce carbon dioxide.

This could be the first step towards forest-protection carbon credits – known as REDD (Reduced Emissions from Deforestation and Degradation) – becoming tradeable in forthcoming US-wide climate laws and even the follow-up to the Kyoto protocol. It's exactly the kind of thing envisaged in the UK government's recent Eliasch Review.

Though everyone agrees that the world must find a way to save its rainforests, there is disagreement about whether it's wise to combine forestry and fossil fuels in the same carbon-trading system. Some experts are concerned that doing so could bring about a massive crash in the carbon price, while others are worried that any such scheme would provide a means for rich countries to buy their way out of climate trouble instead making cuts at home.

As Bryony Worthington of Sandbag recently pointed out to me, there's also the fact that rainforests are due to be affected by the warming climate. It would be ironic if a company in Europe or America could increase emissions in return for protecting a forest that may itself disappear (thereby releasing even more emissions) due to global warming. Forests protection and fossil fuel emissions aren't "fungible", the argument goes. That is, they're not interchangeable.

Those arguments aside, it's refreshing to see the US taking rainforest protection seriously. Something clearly needs to be done on a large-scale to protect tropical forests and even if they doesn't end up in the world's carbon trading systems, the new agreement could help develop valuable carbon accounting methodology in addition to protecting some of the world's most precious and endangered forests.

A European-American strongman helps save a huge swath of exotic jungle. It could almost be the plot of a Schwarzenegger movie …